Does Making Tax Digital affect limited companies?
If your company is VAT registered, then Making Tax Digital has affected you since April 2022, when all VAT-registered businesses had to start keeping digital VAT records and submitting VAT returns using compatible software.
This is called Making Tax Digital for VAT. There are no changes to this coming with Making Tax Digital for Income Tax.
What about Making Tax Digital for Corporation Tax?
Making Tax Digital for Corporation Tax has been announced but there is currently no confirmed start date.
HMRC has run consultations and pilots but no legislation has been introduced to require quarterly Corporation Tax reporting at this stage. For now, Corporation Tax continues to be:
Calculated annually
Filed once per year
Paid nine months and one day after your accounting period ends
That means there is no immediate change to how limited companies file Corporation Tax.
If I’m a director, could I still be affected?
This depends on whether you have any additional income as a sole trader or landlord. Making Tax Digital for Income Tax applies to income from both sole trader income and landlord income.
So, if you’re a director and also own rental property personally or have separate sole trader income (or both), then that income could fall under MTD for Income Tax if it exceeds the relevant threshold.
These are:
From April 2026 if your income is over £50,000
From April 2027 if it’s over £30,000
From April 2028 if it’s over £20,000
What does this mean in practice?
For most limited companies today, the position is exactly the same.
If you’re VAT registered, your VAT returns must already be submitted digitally under Making Tax Digital for VAT. Corporation Tax continues to be calculated and filed annually, with no requirement for quarterly reporting.
As a director, you won’t have to send quarterly Income Tax updates unless you also have separate sole trader or personal rental income above the MTD ITSA thresholds.
Should limited companies prepare for future changes?
There’s no need to restructure or overhaul your systems purely in anticipation of MTD for Corporation Tax. A steady, practical approach is enough.
Keep your records digitally, review your numbers regularly, use compatible software and stay informed about any future changes. If those foundations are in place, you’re well prepared.
Digital records also support more than future compliance. They give you:
Clearer visibility of profit
Better cash flow forecasting
Earlier awareness of your tax position
This makes dividend planning and pension contributions more deliberate, rather than reactive.
What should you do now?
Start by confirming:
Is your company VAT registered and compliant with MTD for VAT?
Do you personally have rental or sole trader income above the MTD thresholds?
Is your bookkeeping system digital and up to date?
Making Tax Digital is part of a broader move towards real-time visibility. When your numbers are current, tax planning becomes something you manage steadily, rather than something you react to once a year.
We’ve created a practical checklist to help UK business owners prepare for Making Tax Digital and keep their records compliant. You can download it here.
If you’d like clarity on how MTD applies to your company and your personal income, get in touch. We can review your position and guide you through it in a straightforward, practical way.